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Cabinet clears draft of Bank-Company (Amendment) Act 2021

Cabinet clears draft of Bank-Company (Amendment) Act 2021

The Cabinet on Monday (May 17 ) approved in principle the draft of Bank-Company (Amendment) Act 2021 aiming to bring more discipline in default loans and good governance along with sustainability in the financial sector.

The approval came from the Cabinet meeting held virtually with Prime Minister Sheikh Hasina in the chair. The PM joined the meeting virtually from her official residence Ganabhaban while her cabinet colleagues attended the meeting at the Bangladesh Secretariat.

“The proposed law is required for overseeing banking business operation, controlling default loans, and ensuring good governance and stability in the financial sector,” said Cabinet Secretary Khandker Anwarul Islam while briefing reporters after the meeting.

The Bank Company Act 1991 doesn’t cover many issues since the number of banks, their assets, loans, deposits, leases, investment and many other things have increased, he said.

The draft law was framed, revising the related banking laws of different countries, said Anwarul.

“The definition of the deliberate loan defaulters and actions against them are not much clear in the existing laws as the Bank Company Act 1991 was framed following the then context. But, the issues have precisely been mentioned in the article 27 (Kha and Ga) of the proposed law,” he said.

Besides, some new provisions were also incorporated in the draft law focusing on different issues like good management and recovery of the weak bank companies, actions against the responsible behind the critical conditions of the vulnerable banks, and reform and merging of banks.

If any director of a bank or any other man gets engaged in irregularities, the person will have to count a huge amount as fine alongside facing the criminal charge, said the cabinet secretary.